This commands clears all "local" style attributes from the current selection, that is, attributes that are set within the selection itself rather than attributes it is inheriting from a higher level.
While this is selected, OmniOutliner will automagically create level styles based on the way you style rows in each level. For instance, if you manually set every fourth-level row in your outline to be italic, the italic style will get promoted to the All level 4 rows style in the styles palette. Then any new rows you create at that level will have the same style.